UPDATE 1-Czech central bank: Crown appreciation surprising

Published 12:21 PM ET Sun, 11 Nov 2012

* Board did not agree whether extra easing tools needed

* Impact of fiscal tightening on FX firming was discussed

(Adds details, background of fiscal policy)

PRAGUE, Oct 5 (Reuters) - The Czech central bank's board members did not agree on whether an intervention to weaken the crown was needed, even though they found the currency's appreciation to be surprising, the minutes of the bank's Sept. 27 meeting showed.

The crown's stronger appreciation will need to be taken into account in future monetary policy deliberations, according to the minutes, published on Friday.

The central bank cut the key two week repo rate to an all-time low of 0.25 percent last week to prop up the recession-hit economy, where weak consumer spending is creating no price pressures for the bank to worry about.

The crown exchange rate is a key variable in the bank's inflation outlook, which projects price growth slowing below the bank's 2 percent target by the end of the next year. A strong currency would only exacerbate the disinflationary trend.

Now that rates are near zero, Governor Miroslav Singer said at the time of the meeting that the board agreed foreign exchange interventions would be the next easing tool should the bank wish to loosen policy more.

The crown has firmed by 3.7 percent since the end of June, shrugging off the bank's previous rate cut on June 28, which came after more than two years of rate stability.

For TEXT.................................... For HIGHLIGHTS from Sept 27 mtg............. For STORY from Sept 27 mtg..................